Bookkeeping refers mainly to the record-keeping aspects of accounting. Bookkeeping is essentially the accounting process (some would say the drudgery) of recording all the information regarding the transactions[more…]

Even if all transactions during the year (or other business period) have been recorded correctly, the business's accounts still aren't quite ready for preparing the financial statements. Additional procedures[more…]

Good business bookkeeping systems leave good audit trails. An audit trail is a sequence of events leading up to a bookkeeping entry in your business's accounts. You start with the source documents and[more…]

The current ratio compares your current assets to your current liabilities, providing a quick glimpse of your business’s ability to pay its bills. The formula for calculating the current ratio is[more…]

In double-entry bookkeeping you enter all transactions in the books twice: once as a debit and once as a credit. To keep your debits and credits straight follow this table which shows you how both impact[more…]

Having your business reach a profit is important; if it doesn’t, sooner or later the business will fail. As a business manager, you want to keep a close eye on the financial statements and make the necessary[more…]

Bookkeepers use various methods for valuing stock. Your company must choose one method and follow that method all the time, in order to keep the tax man happy. Four ways in which you can do this are:[more…]

At the root of any system you’ll find the essential elements that form the basis of that system. In the world of bookkeeping, the three most fundamental building blocks to any bookkeeping system are:[more…]

In double-entry bookkeeping, you enter all transactions in the books twice: once as a debit and once as a credit. This chart shows you how debits and credits affect your various business accounts:[more…]

Accountants use depreciation as a way to allocate the costs of a fixed asset over the period in which the asset is useable to the business. The bookkeeper records the full transaction when the asset is[more…]

Any asset that has a lifespan of more than a year is called a fixed asset. All businesses use equipment, furnishings, and vehicles that last more than a year. Although they may last longer than other assets[more…]

When calculating depreciation of your business assets each year, you have a choice of four methods: Straight-Line, Sum-of-Years-Digits, Double-Declining Balance, and Units of Production. After you decide[more…]

When using QuickBooks for your accounting system, you don’t have to manually calculate depreciation expense amounts for your business. The Planning & Budgeting section of QuickBooks includes Decision Tools[more…]

Most businesses borrow money for both long-term periods(periods of more than one year) and short-term periods(periods of one year or less). Long-term debt can include a 5-year car loan, 20-year mortgage[more…]

After business owners check the accuracy of their accounting books, they can finalize the cash journals and prepare financial reports to verify the company’s financial success or failure during the last[more…]

When your business allows customers to use credit cards, you pay fees to the bank that processes these transactions, which is probably the same bank that handles all your business accounts. These fees[more…]

If your business accepts credit cards as a payment option, you’ll need to reconcile credit card statements against the company’s books. Each month, the bank that handles the credit-card sales for your[more…]

In order to keep good accounting records, you must track how much you depreciate each of your business assets in some form of a schedule. After all, your financial statements only include a total value[more…]